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Poverty – Dimensions and Challenges Explained

Last updated on February 25, 2024 by Pallavi Aggarwal

Poverty is a state or condition in which a person lacks the resources for a minimum standard of living.

Traditionally, the term poverty refers to lacking enough resources to provide the necessities of life – food, clean water, shelter, and clothing. But modern economists extend the term to include access to health care, education, and even transportation.

Poverty is often further divided into absolute poverty and relative poverty.

Table of Contents

Poverty Definition by the United Nations (UN)

Fundamentally, poverty is a denial of choices and opportunities, a violation of human dignity.

• It means a lack of basic capacity to participate effectively in society.
• It means not having enough to feed and cloth[e] a family, not having a school or clinic to go to, not having the land on which to grow one’s food or a job to earn one’s living, not having access to credit.
• It means insecurity, powerlessness, and exclusion of individuals, households, and communities.
• It means susceptibility to violence, and it often implies living in marginal or fragile environments, without access to clean water or sanitation.

As per the United Nations Organisation (UN), poverty entails more than the lack of income and productive resources to ensure sustainable livelihoods. Its manifestations include hunger and malnutrition, limited access to education and other basic services, social discrimination and exclusion, as well as the lack of participation in decision-making.

Poverty Definition by the World Bank

In 1990, the World Bank introduced the concept of ‘poverty line’ to capture absolute poverty. Then, it was set at $1 per day.

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As per the revised measures (2017), the World Bank defines extreme poverty as someone living on less than US$1.90 per day. This figure is known as the International Poverty Line (IPL).

In an attempt to be more precise with its classifications, the organization recently added new standards of poverty for people living in middle and high-income countries. Now, poverty lines are set at $3.20 a day for people in “lower-middle-income” countries, such as Egypt or India, and $5.50 a day for “upper-middle-income” countries, such as Jamaica or South Africa. The World Bank also released a third standard for high-income countries, like the US, at $21.70 a day.

In 2018, the World Bank introduced a Societal Poverty Line (SPL) , to capture the relative aspect of poverty. The SPL is a hybrid line, combining the US$1.90-a-day absolute poverty line with a relative component that increases as median consumption or income in an economy rises.

However, no single indicator can capture the multiple dimensions of poverty.

Poverty Estimation by Dr Amartya Sen

Dr Amartya Sen provided a useful alternative to understanding poverty.

His capability approach to understanding poverty goes beyond income and stresses the whole range of means, available to achieve human capabilities such as literacy, longevity, and access to income.

Poverty Line

The conventional approach to measuring poverty is to specify a minimum expenditure (or income) required to purchase a basket of goods and services necessary to satisfy basic human needs. This minimum expenditure is called the poverty line.

The basket of goods and services necessary to satisfy basic human needs is the Poverty Line Basket (PLB).

The proportion of the population below the poverty line is called the poverty ratio or headcount ratio (HCR).

Most countries and international institutions (World Bank, United Nations, etc.) follow a similar approach to counting the poor.

Also read: Economic and Social Development – Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

The Global Multidimensional Poverty Index (MPI)

The Global Multidimensional Poverty Index (MPI) is an international measure of multidimensional poverty covering 107 developing countries.

Global MPI was first developed in 2010 by the Oxford Poverty and Human Development Initiative (OPHI) and the United Nations Development Programme (UNDP) for UNDP’s Human Development Reports.

The Global MPI is released at the High-Level Political Forum (HLPF) on Sustainable Development of the United Nations in July, every year.

Global MPI 2020

The Global Multidimensional Poverty Index (MPI) compares acute multidimensional poverty for 107 countries in developing regions. These countries are home to 5.9 billion people, three-quarters of the world’s population.

Of these people, 1.3 billion people (22%) are identified by the global MPI as multidimensionally poor as per the Global Multidimensional Poverty Index 2020.

According to Global MPI 2020, India is 62 nd among 107 countries with an MPI score of 0.123 and a  27.91% headcount ratio , based on the NFHS 4 (2015/16) data.

3 Dimensions and 10 Indicators in MPI

The MPI assesses poverty at the individual level.

If a person is deprived in a third or more of ten (weighted) indicators, the global MPI identifies them as ‘MPI poor’.

The extent – or intensity – of their poverty is also measured through the percentage of deprivations they are experiencing.

Other parameters include:

• disempowerment
• poor quality of work
• social exclusion
• rural-urban disparity
• the threat of violence,
• living in environmentally hazardous areas

The need for understanding multiple connotations

• Monetary-based poverty measures are inadequate: In most cases, not all individuals who are income-poor are multidimensionally poor, and not all multidimensionally poor individuals are income-poor.
• Economic growth does not always reduce poverty or deprivation.  Several studies have found that economic growth is not strongly associated with a reduction in other deprivations, such as child malnutrition or child mortality.
• Poverty as multidimensional : Poor people describe ill-being to include poor health, nutrition, lack of adequate sanitation and clean water, social exclusion, low education, bad housing conditions, violence, shame, disempowerment, and much more.
• Need for more policy-relevant information on poverty, so that policymakers are better equipped to deal with it: For example, an area in which most people are deprived of education requires a different poverty reduction strategy from an area in which most people are deprived of housing conditions.

Poverty Estimation in India

In India, the first official rural and urban poverty lines at the national level were introduced in 1979 by Y. K. Alagh Committee and official poverty counts began for the first time.

Later, in 1993, the D. T. Lakdawala Committee extended these poverty lines to states and over time allowing official poverty counts over time and in the states.

In 2005, recognizing that the rural poverty line was too low, the government appointed the Tendulkar committee to take a fresh look at the poverty lines. Reporting in 2009, the Tendulkar Committee revised upward the rural poverty line. Continued media criticisms led the government to appoint the Rangarajan Committee in 2012.

Reporting in June 2014, the Rangarajan Committee recommended raising further both the rural and urban poverty lines. The decision is yet to be taken on the Rangarajan Committee recommendations.

Therefore, the Tendulkar poverty line remains the official poverty line and is the basis of the current official poverty estimates in 1993-94, 2004-05, and 2011-12.

Note: As per the Tendulkar estimation, the percentage of people living below the poverty line in India is 21.9% . However, as per Rangarajan’s estimation, the percentage of people living below the poverty line in India is 29.5%.

Also read: Urban Poverty

Poverty alleviation programs in India

India has been conducting various poverty alleviation programs.

Employment programmes and skill-building

• Jawahar Gram Samriddhi Yojana:  The JRY was meant to generate meaningful employment opportunities for the unemployed and underemployed in rural areas through the creation of economic infrastructure and community and social assets.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005: The Act provides 100 days of assured employment every year to every rural household. One-third of the proposed jobs would be reserved for women. Under the programme, if an applicant is not employed within 15 days s/he will be entitled to a daily unemployment allowance.
• National Rural Livelihood Mission : Ajeevika (2011): It evolves out the need to diversify the needs of the rural poor and provide them jobs with regular income every month. Self Help Groups are formed at the village level to help the needy.
• National Urban Livelihood Mission : The NULM focuses on organizing urban poor in Self Help Groups, creating opportunities for skill development leading to market-based employment and helping them to set up self-employment ventures by ensuring easy access to credit.
• Pradhan Mantri Kaushal Vikas Yojana : It will focus on the fresh entrants to the labor market, especially the labor market and class X and XII dropouts.

Food and shelter

• Food for Work Programme:  It aims at enhancing food security through wage employment. Food grains are supplied to states free of cost, however, the supply of food grains from the Food Corporation of India (FCI) godowns has been slow.
• Annapurna: This scheme was started by the government in 1999–2000 to provide food to senior citizens who cannot take care of themselves and are not under the National Old Age Pension Scheme (NOAPS). This scheme would provide 10 kg of free food grains a month for eligible senior citizens. They mostly target groups of ‘poorest of the poor’ and ‘indigent senior citizens’.
• Pradhan Mantri Awaas Yojana : It has two components: Pradhan Mantri Awaas Yojana (Grameen) and Pradhan Mantri Awaas Yojana (Urban). It was launched in 2015. It unites schemes like Ujjwala Yojana (provides LPG to BPL), access to toilets, water, and drinking water facilities, and Saubhagya Yojana (electricity).
• Other schemes like the Integrated Child Development Program, Midday Meal scheme, etc are also providing food to the needy sections like children and women.

Access to credit

• Pradhan Mantri Kisan Samman Nidhi : This scheme aims to provide financial assistance to provide working capital support to all the landholding farmers. This brings in the idea of universal basic income for the farmers in India.
• Pradhan Mantri Jan Dhan Yojana : It aimed at direct benefit transfer of subsidy, pension, insurance, etc., and attained the target of opening 1.5 crore bank accounts. The scheme particularly targets the unbanked poor.
• Integrated Rural Development Programme (IRDP ): It was introduced in 1978-79 and aimed at assisting the rural poor in the form of subsidy and bank credit for productive employment opportunities through successive plan periods.
• The incidence of extreme poverty continues to be much higher in rural areas than in urban areas.
• Despite rapid growth and development,  an unacceptably high proportion of our population continues to suffer from severe and multidimensional deprivation. 
• While a large number of poverty alleviation programmes have been initiated, they function in silos. There is  no systematic attempt to identify people who are in poverty , determine their needs, address them, and enable them to move above the poverty line.
• The  resources allocated to anti-poverty programmes are inadequate and there is a tacit understanding that targets will be curtailed according to fund availability. For instance, the Mahatma Gandhi National Rural Employment Guarantee Act does not provide the guaranteed 100 days of work in many states.
• There is  no method to ensure that programmes reach everybody they are meant for .
• Lack of proper implementation and right targeting
• There has been a  lot of overlapping of schemes.
• Every year a huge number is added to the population pool of the country.  This renders the scheme ineffective.

Way Forward

The World Health Organization has described poverty as the greatest cause of suffering on earth. Poverty eradication should not be the goal of the government but the goal of the government policies should be to create prosperity. Both monetary and non-monetary measures of poverty are needed to better inform the policies intended to address the needs and deprivations faced by poor populations.

Accelerating rural poverty reduction:

• It’s  not just about agricultural growth , which has long been considered the key driver of poverty reduction. Rural India is not predominantly agricultural and shares many of the economic conditions of smaller urban areas.
• Capitalizing on the growing connectivity between rural and urban areas , and between the agriculture, industry, and services sectors, has been effective in the past.

Creating more and better jobs

• Future efforts will need to address job creation in more productive sectors, which has until now been lukewarm and has yielded few salaried jobs that offer stability and security.

Focusing on women and Scheduled Tribes

• The most worrying trends are the  low participation of women in the labour market and the  slow progress among scheduled tribes .
• India’s women  have been  withdrawing from the labour force since 2005 and less than one-third of working-age women are now in the labour force. As a result, India today ranks last among BRICS countries, and close to the bottom in South Asia in female labour force participation.
• Scheduled Tribes  started with the highest poverty rates of all of India’s social groups, and have progressed more slowly than the rest.
• Women and Scheduled Tribes  are at risk of being locked out of India’s growth and prosperity.

Improving human development outcomes for the poor

• The recent past shows that some problems, such as  undernutrition and open defecation , are endemic and not only confined to the poor but others too, and have not improved with economic growth.
• Better health, sanitation, and education will not only help raise the productivity of millions, they will also empower the people to meet their aspirations and provide the country with new drivers of economic growth.

Together with mooting the discussion on the need to provide a universal basic income , infrastructural and skill development combined with effective implementation of welfare policies will go a long way in eradicating poverty in the country.

Read:  Household Consumption Expenditure Survey (HCES)

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About Pallavi Aggarwal

Pallavi Aggarwal is a graduate from a prestigious college in Delhi with a keen interest in Political Science and Current Issues. She had qualified for the UPSC CSE Interview in 2018. She was a gold medalist in school and a district topper.

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Poverty and Developmental Issues

Sub-Categories:

Indian Society

Table of Contents

• What is poverty
• What are the distinct characteristics of poverty in India
• What are the factors contributing to poverty in India
• What are the developmental issues which arise due to poverty in India
• How is poverty in India related to its demography
• What measures can help to alleviate poverty in India

Prelims: Economic and Social Development - Poverty

Mains: Poverty and developmental issues

What is poverty?

Poverty is a situation where individuals, households or communities lack the necessary resources to meet their basic needs for food, shelter, clothing, healthcare, and education .

According to the World Bank, “Poverty is hunger . Poverty is a lack of shelter. Poverty is being sick and not being able to see a doctor. Poverty is not having access to school and not knowing how to read. Poverty is not having a job; it is fear for the future, living one day at a time. Poverty is losing a child to illness brought about by unclean water. Poverty is powerlessness, lack of representation, and freedom".

What is the status of poverty in India?

• Incidence of poverty:  
• According to the MPI report by NITI Aayog in 2021, 25.01% of the population in India was multidimensionally poor.
• Intensity of poverty: The number of extremely poor in India has decreased by 12.3% between 2011 and 2019 (World Bank).
• Multidimensional Poverty: India has also shown improvement in multidimensional poverty rate as below:
• 18.7% is classified as vulnerable to multidimensional poverty (260.9 million people in 2020).
• Regional variations : According to National MPI, there are significant regional variations in poverty rates across states in India. 

What are the distinct characteristics of poverty in India?

Some of the important characteristics of poverty in India are:

• The poverty ratio was as high as 32.75% in rural areas compared to  8.81% in urban areas. (NITI Aayog MPI, 2021)
• 5% of the population own more than 60% of the country’s wealth (Oxfam report 2022)
• Lack of education : Poverty is closely linked to lack of education in India. The literacy rate in rural areas is lower than in urban areas, and illiteracy often leads to limited job opportunities and low wages.
• Health problems : Poverty is associated with poor health outcomes in India, including malnutrition, high infant mortality rates, and a higher prevalence of diseases such as tuberculosis.
• Scheduled Castes still constitute almost one-fourth of India’s multidimensionally poor people. (Global MPI 2021)
• Gender Inequality : India also struggles with gender inequality, which can contribute to poverty among women. Women often face discrimination in education, employment, and healthcare, which can limit their opportunities and exacerbate poverty.
• Informal Economy: A major portion of India's workforce is employed in the informal sector. This leads to low wages, poor working conditions, lack of social protections, difficulty in accessing financial services, etc.

What are the factors contributing to poverty in India?

The following can be some of the reasons leading to poverty in India:

• Population explosion : The rapid growth of the population puts constraints on limited resources. This leads to people being deprived of basic necessities.
• Lack of Agricultural productivity : Fragmented holdings, use of traditional methods, obsolete technology, etc., leads to low agricultural productivity. This reduces income levels and pushes vulnerable sections into poverty.
• Lack of education : It creates a vicious cycle of poverty where a person is not able to afford basic necessities.
• Lack of employment opportunities : Job opportunities have not kept pace with the increasing population leading to poverty. Further lack of skilling or low skilling compounds this.
• Inadequate WASH (Water, Sanitation, and Hygiene) facilities: People living in rural areas, urban slums, disaster-prone areas, etc., are the most vulnerable and the most affected due to the lack of WASH facilities leading to poverty.
• Climate change : climate change affects the poor disproportionately due to lack of information about weather events, lack of access to basic facilities, etc.
• Social factors : Certain sections of society are more vulnerable to poverty due to caste and class dynamics, traditional structure, etc.
• Low per capita income: India is a developing country with a low per capita income. Many people in India live on less than $2 a day.

What are the developmental issues which arise due to poverty in India? 

High poverty prevalence in India can have a range of consequences like

• Example : India has the highest number of stunted children in the world, accounting for nearly a third of the global total. (Global Nutrition Report 2020)
• Children from poor families often drop out of school to work and earn money.
• Example : IMR is 35.2 as per National Family Health Survey 5(2019-21)
• Social exclusion : Poverty can lead to social exclusion, as individuals and households may be unable to participate fully in social and economic activities.
• Increased crime rates : Poverty can lead to increased crime rates, as individuals may resort to criminal activity as a means of survival.
• Inadequate housing and sanitation: Lack of access to basic amenities like clean water, sanitation facilities, and adequate housing among the poor can lead to a range of health problems, including diarrhea and other water-borne diseases.
• Gender inequality: Poverty in India disproportionately affects women and girls. Girls are often denied access to education and are more likely to be married off at a young age. Women are also more likely to work in low-paid and insecure jobs.
• Environmental degradation: Poverty often leads to unsustainable practices, such as overuse of natural resources and deforestation, which can have a detrimental effect on the environment. 
• Internal migration: Poverty also leads to people migrating from rural areas to urban centers in search of better economic opportunities. This leads to a rise in the informal sector and the growth of slums in urban areas.

How is poverty in India related to its demography?

The relationship between demography and poverty is complex. Both reinforce each other creating a vicious cycle. 

What measures can help to alleviate poverty in India?

• Investing in education: Providing access to education and vocational training can help individuals acquire the skills and knowledge needed to secure better-paying jobs.
• Promoting economic growth: Fostering economic growth through policies that promote entrepreneurship, innovation, and investment can create new job opportunities and lift people out of poverty.
• Providing access to basic services : Providing access to basic services such as healthcare, clean water, sanitation, and electricity can improve health outcomes, particularly in rural areas.
• Proper implementation of social protection programs : Accountable and transparent implementation of social protection programs such as cash transfers, food subsidies, and public distribution programs can provide a safety net for individuals and households living in poverty.
• Promoting gender equality: It can help to reduce poverty, as women often face greater barriers to education, healthcare, and economic opportunities.
• Strengthening agricultural productivity : It can help to reduce poverty in rural areas, where a large proportion of the population is engaged in agriculture.
• Addressing income inequality : Addressing income inequality through progressive taxation and other policies can help to reduce poverty and improve social cohesion.
• Encouraging inclusive growth : Encouraging inclusive growth that benefits all sections of society can help to reduce poverty and promote sustainable development.

Previous Year Questions

Q) In a given year in India, official poverty lines are higher in some states than in others because( 2019 )

(a) poverty rates vary from State to State

(b) price levels vary from State to State

(c) Gross State Product varies from State to State

(d) quality of public distribution varies from State to State

Q) COVID-19 pandemic accelerated class inequalities and poverty in India. Comment. ( 2020 )

Q) Despite implementation of various programmes for eradication of poverty by the government in India, poverty is still existing.’ Explain by giving reasons. ( 2018 )

Q) An essential condition to eradicate poverty is to liberate the poor from deprivation.” Substantiate this statement with suitable examples. ( 2016 )

Q) Critically examine whether growing population is the cause of poverty or poverty is the main cause of population increase in India. ( 2015 )

Frequently Asked Questions (FAQs)

Q) what are absolute poverty and relative poverty  .

Absolute poverty refers to when a person or household does not have the minimum amount of income needed to meet the minimum living standards. Relative poverty refers to a situation where individuals or households have a lower standard of living compared to the rest of society. In this case, poverty is measured relative to the average income or standard of living in a particular society or country.

Q) What is Multidimensional Poverty Index(MPI)?

The MPI is a measure of poverty that takes into account multiple dimensions (education, health, and standard of living) that contribute to the experience of poverty. The index was developed by the Oxford Poverty and Human Development Initiative (OPHI) in collaboration with the United Nations Development Programme (UNDP). 

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Poverty in India: Reasons, Responses, Solutions

From Current Affairs Notes for UPSC » Editorials & In-depths » This topic

Note: This article is dynamic i.e., updates are automatically shown from recent current affairs at the bottom of the article.

What is Poverty?

• Prior to the 1990s when India was a closed economy, the public distribution system provided necessary resources to all the citizens. However, due to the financial constraints and policy changes after the commencement of Globalisation in India, the government provided necessary resources to the target population i.e., those who deserve governmental assistance.
• This lead to the Government’s adoption of the Targeted Public Distribution System. That is, the Government provided subsidised food to those who come under Below Poverty Line.
• It is difficult to give the exact definition of poverty as it has numerous causes and characteristics. It differs from nation-nation, urban-rural, etc. in other words, the definitions of poverty are based on perspectives.
• However, the general idea is that when an individual has lesser accessibility and affordability to certain essentials like food, clothes, a place to live, healthcare, education, etc., then he is said to be living in poverty.
• The UN and the World Bank calculate poverty through Purchasing Power Parity and nominal relative basis.
• Therefore the poverty estimation differs during varying perceptions.

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How was poverty estimated in India?

Estimation of poverty in british india:.

• In India, the first-ever Poverty estimation was done by Dadabhai Naoroji in 1901 which was published in his book “Poverty and Un-British Rule in India”
• The National Planning Committee of 1936 has estimated poverty in India during the Colonial rule. It calculated poverty linking nutrition, clothing, and housing. This method was used in Independent India also. The poverty estimation by the National Planning Committee showed a grim picture of British India’s Economy

Estimation of poverty in Independent India:

• A working group was set up in 1962 to estimate the poverty line of the country.
• This estimation was based on the minimum calories required to survive and the cost estimates of the minimum calories in Rural India. According to this, the average poverty line is Rs.20 per month. Based on 1960-61 prices.
• Alagh Committee: Until 1979, poverty was calculated based on the income of the citizens. In 1979, based on the recommendation by a committee headed by Y K Alagh, poverty was estimated based on the calories consumed by the population. According to the committee, poverty estimation differs in rural and urban areas. In the rural area, if a resident consumes less than 2400 calories per day, then he/ she belongs BPL population. In an urban area, if a resident consumes less than 2100 calories per day then he/she suffers from poverty. This is an assumption that the urban population needs lesser calories as they are not involved in physical works like that of the rural population. The Alagh committee was the first in India to define the poverty line.
• Lakdawala Formula: This was proposed by Lakdawala Committee that was headed by D.T.Lakdawala. This is also based on household per capita expenditure. Lakdawala committee used the same method used by the Alagh committee. However, it included certain criteria that were missing in the latter. Health and education were considered during the estimation. This committee used CPI-IL (Consumer price index for Industrial Labourers) and CPI-AL (Consumer price index for Agricultural labourers to determine the poverty line. In this method, the average of the minimum necessary per capita household expenditure is calculated to estimate the poor. The obtained value is the base for the poverty line and anyone who lives in a household with per capita expenditure lesser than the obtained average belongs to the BPL. Through this method, it was estimated that 36% of the population were BPL in 2004-2005 and 22% of the population under BPL in 2011. Poverty in India was estimated using this method until 2011.
• Suresh Tendulkar Committee: This committee was set up by the Planning commission in 2005. The methods recommended by this committee are used in the current times. It urged the shift from a calorie-based model and inclusion of monthly expenditure on education, health, electricity, and transport. It introduced the new term “Poverty Line Basket” to determine and estimate poverty. It called for the uniformity of the poverty line basket for both urban and rural areas. If a person does not have access to any of the goods mentioned under the poverty basket then he/she is suffering from poverty. This method uses the cost of living as the basis for identifying poverty. However, the resulted estimation was very low and resulting in public outcry. This lead to the formation of the Rangarajan Committee.
• Rangarajan Committee: Formed in the year 2012, this committee was chaired by Rangarajan. This too adopted calorie-based calculation of the poverty level. This had limitations as it calculated only the absolute minimum necessities. This did not include comfortable living standards as a necessity.
• Current status of poverty line estimation: The above cases show the complexity and difficulty in the determination of the poverty line. Currently, the Indian government still hasn’t found a solid solution to estimate the poverty level of the country. The task was given a 14 member task force headed by NITI Aayog vice-chairman, Aravind Panagaria. They too have failed and have recommended setting up of a new specialised panel to debate the issue.

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What are the causes of poverty (Indian perspective)?

• Colonial exploitation: India under the colonial hegemony was forced to de-industrialize resulting in increased raw material production and a decrease in the export of value-added goods like traditional handicrafts and textiles. The natives were forced to buy British goods, thus discouraging them from manufacturing indigenously. This led to massive unemployment. The droughts, diseases, and others increased the plight of the Indians during that time.
• Increase in the population : the rapid increase in the population due to a decrease in the mortality rate and an increase in the birth rate can be an asset for the Indian economy. However, in the present scenario, this is turning out to be a liability due to massive unemployment and an increase in the dependence on those working populations. The massive population must be converted to human capital to promote the growth of the economy.
• Natural Calamities : In India, the maximum of the population who belong to BPL is from states of Bihar, Jharkhand, Odisha, Madhya Pradesh, Chattisgarh, Uttar Pradesh, and Uttarakhand. The reason behind this is that these states are prone to natural disasters and also most of the population in these states are from SC/STs thus making them unrepresented. The natural calamities in these states hamper the agricultural progress and economic development of these states.
• The rise of unorganised sectors : many sectors in the Indian economy are unorganised. This brings in the problem of labour exploitation. The increase in demand for work also causes job insecurities.
• Failing Agricultural sector : the agricultural sector is one of the most vulnerable sectors of the Indian economy. Farmer suicides and protests are on the rise due to the increasing debt and decrease in production. This, in the long run, would result in them suffering from poverty. This sector employs a maximum of the Indian population but provides little profit.
• Lack of investment : The investment provides more job opportunities. For this, the Indian economy must be favourable for foreign investment. However, some parts of India remain unfavourable due to corruption , political instability, militancy etc.
• Social factors : Illiteracy, unrepresented minorities, social norms, caste systems are still prevalent in certain parts of India.
• Lack of skilled labour : the population can be an asset to the economy if it is utilized efficiently. This can be done through human capitalization. Measures to improve the literacy of the population are very slow. Some, due to the lack of sufficient skills are not accepted in the workforce. This results in unemployment and poverty.
• Corruption: Many measures have been taken by the government to eliminate poverty. However, there is still a lack of political will. The corruption by those in power also contributes to poverty.
• Inefficient use of resources : India is a country that has abundant natural resources which, if utilized efficiently, without wastage, can be turned into an asset.
• Lack of entrepreneurship : There are many activities in India that can be of asset to the economy. For example, some tribes have rich art and culture which can be utilized for the tribes’ growth and development through proper entrepreneurship. However, due to a lack of leadership and entrepreneurial skills, they go to waste. The tribes remain one of the most vulnerable sections of Indian society.
• Lack of infrastructure : Many parts of India still remain isolated despite the rapid economic growth. There are several villages in India that still don’t have access to basic commodities like electricity, thus resulting in poor standards of living. They don’t even have proper roads or railways. Their contribution to the economy goes to waste due to inaccessibility.
• Recession induced by coronavirus pandemic .

What is the current status?

• The 2019 Global Multidimensional Poverty Index published by the UN Development Program has estimated that multidimensional poverty in India has fallen by 27.5% between 2005-06 and 2015-16. Multidimensional poverty means the estimation of poor not only based on income but also several factors such as poor health, poor working conditions, etc.
• According to World Poverty Clock , close to 44 Indians are escaping from extreme poverty each minute.
• As of 2011, 21.9% of the Indian population belongs below the poverty line.
• The unemployment rate as of April 2021 is 7.1%. This is a huge problem as unemployment is the direct cause of poverty in the country. The recent years saw a rapid increase in infrastructural developments like roads and housing projects for the alleviation of the poor. This might help boost investments in the country increasing job opportunities.
• According to a World Bank working paper, extreme poverty in India dropped to 10.2%  in the  pre-Covid year of 2019  from as much as  22.5% in 2011  .

Covid induced poverty according to Pew report

• The poverty rate in India likely increases to 9.7% in 2020, up sharply from the January 2020 forecast of 4.3%.
• From 2011 to 2019, the number of poor in India was estimated to have decreased to 78 million from 340 million.
• Poor: People with incomes of USD 2 or less a day.
• Increase in India accounts for nearly 60% of the global increase in poverty.
• Record increase in  Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)  participants as proof that the poor were struggling to find work.
• Middle Class: people with incomes of around Rs. 700-1,500 or USD 10-20 per day.
• The middle-income group is likely to have decreased from almost 10 crores to just 6.6 crores.
• The huge majority of India’s population falls into the low-income group.
• Low Income Group: people earning about Rs.150 to 700 per day.
• Rich: Includes the people who earn more than Rs.1,500 a day.
• The lockdown triggered by the pandemic resulted in shut businesses, lost jobs, and falling incomes, plunging the Indian economy into a deep recession.

What are the measures taken by the government to alleviate poverty?

• Swarnajayanti Gram Swarozgar Yojana :
• It was launched on April 1, 1999.
• This program merged Integrated Rural Development Program, Training of Rural Youth for Self Employment (TRYSEM), Development of Women and Children in Rural Areas (DWCRA), Million Wells Scheme (MWS), Supply of Improved Toolkits to Rural Artisans (SITRA) and Ganga Kalyan Yojana.
• Its objective is to alleviate the beneficiaries from BPL.
• It helps promote the self-employment of the rural poor.
• The fund sharing between the Centre and the State is at the ratio of 75:25.
• This scheme aims at working in clusters to provide inclusive and effective aid to the rural poor.
• The rural poor are organized into SHGs to provide training, capacity building and providing assets to generate income.
• This scheme was renamed as National Rural Livelihood Mission in 2011.
• This was finally merged to Deen Dayal Upadhyaya Antyodyaya Yojana to provide skills training for the poor. This scheme also provides subsidies and shelters for the homeless. The vendor markets are developed to promote job in the rural areas.
• Jawahar Gram Samriddhi Yojana:
• This scheme replaced the erstwhile Jawahar Rozgar Scheme.
• It was launched in April 1999 to generate employment in rural areas through infrastructure development.
• Pradhan Mantri Awaas Yojana:
• It has two components: Pradhan Mantri Awaas Yojana (Grameen) and Pradhan Mantri Awaas Yojana (Urban)
• It was launched in 2015.
• It unites schemes like Ujjwala yojana (provides LPG to BPL), access to toilets, water, drinking water facilities and Saubhagya Yojana (electricity).
• Mahatma Gandhi National Rural Employment Guarantee Act,2005:
• Launched on February 2, 2005
• It provides 100 days of guaranteed employment to rural households.
• 1/3 rd of the jobs reserved for women.
• If the jobs are not available for the applicants, and they were without jobs within 15 days, then they will be given unemployment allowance.
• This guarantees employment opportunities to the rural population and accountability of the government.
• Under this, National Food for Work, which was launched in 2004 was subsumed in 2006.
• The National Food for Work provided additional resources and assistance that are absent under Sampoorna Grameen Rozgar Yojana. Under this program, 150 districts were identified as backward by the Planning Commission. They were the beneficiaries of this program. Food security , employment through need-based social, economic, and community assets
• Pradhan Mantri Kaushal Vikas Yojana :
• Launched by the Ministry of Skills Development and Entrepreneurship in 2015.
• It is a scheme aimed at the enhancement of skills based on the demand of the economy.
• This scheme is implemented through Nation Skill Development Corporation (NSBC).
• Training and assessment fees are paid by the government.
• The training provided under this scheme is based on National Skill Qualification Framework and industry-level standards.
• The beneficiaries include college graduates and school/ college dropouts.
• Rythu Bandhu Scheme: This was a scheme implemented in Telangana to provide financial assistance of Rs.4000 per acre per season to all land-owning farmers.
• Pradhan Mantri Kisan Samman Nidhi : This scheme aims to provide financial assistance to provide working capital support to all the landholding farmers. This brings in the idea of universal basic income for the farmers in India. Read more
• Social security schemes
• Atmanirbhar bharat abhiyan
• Production linked incentive scheme
• Garib kalyan rojgar abhiyaan

Way Forward:

• The government must provide transparency and accountability to various organizations that are responsible for the implementation of the Welfare Schemes.
• Infrastructure development and skills development must be made a top priority.
• More govt expenditure in health, nutrition, and education.
• The problem of the inability to determine the poverty line must be resolved to help the target population.
• Direct income transfer to the needy is an immediate solution. Universal Basic Income should also be considered.
• Investment in Agriculture by the government is necessary to decrease rural poverty. Subsidies address only short-term issues. Also, there is a need to develop technologies, with the help of which farmers can practice all-weather agriculture.
• Employment-oriented growth:  create jobs in modern sectors and promote labour-intensive industries.
• Reduce corruption for efficient service delivery.
• Resilience for poor households to withstand major shocks: through holistic, multi-faceted intervention designed to help people lift themselves from extreme poverty by providing them with the tools, skills, and resources required to deal with the challenges that keep them trapped in a state of destitution. In addition to providing assets such as livestock, the government should also provide livelihood and financial skills training to make these assets productive; personal coaching to instill confidence and hope; basic health care for families, and more.

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